Gibson Settles “Wood” Issue With Dept. Of Justice

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No prosecution or criminal action will be brought against Gibson

After months of being up in the air – and then weeks of talks, the situation between Gibson and the Feds – namely the Fish and Wildlife Service – appears to be coming to a close.

The Background Story

Image from the Federal raid

For those who don’t have the history on this situation, here is some background reading from our coverage of this situation:

In August of 2011, Gibson was raided by armed federal agents who brought the workday to a standstill for employees of both the Memphis and Nashville Gibson Factories. CEO Henry Juskiewicz responded with a press conference a few days later. Here is our coverage on that.

In September of 2011, Juskiewicz met with the Feds, and due to the onslaught of information on the topic, and the general confusion surrounding what exactly was going on, we did a little background story on what exactly Gibson was allegedly in trouble for:

A few weeks later, a letter from Assistant Attorney General Ronald Weich and the director of legislative affairs at the Interior Department Christopher J. Mansour that anyone in possession of an instrument made of illegal wood would be safe from prosecution and would not have their instrument taken away, for example at airports.

The Breaking News

Today, in a press release, Gibson revealed that they have settled “all issues” with the Department Of Justice and the US Government in general.

Gibson CEO Juskiewicz states:

“We felt compelled to settle as the costs of proving our case at trial would have cost millions of dollars and taken a very long time to resolve. This allows us to get back to the business of making guitars. An important part of the settlement is that we are getting back the materials seized in a second armed raid on our factories and we have formal acknowledgement that we can continue to source rosewood and ebony fingerboards from India, as we have done for many decades.”

Although it is a “settlement”, there is still no doubt that Gibson feels they were improperly and inappropriately targeted in the raid, and the subsequent lack of charges being pressed by the Feds.

Juskiewicz had this to say:

“We feel that Gibson was inappropriately targeted, and a matter that could have been addressed with a simple contact a caring human being representing the government. Instead, the Government used violent and hostile means with the full force of the US Government and several armed law enforcement agencies costing the tax payer millions of dollars and putting a job creating US manufacture at risk and at a competitive disadvantage. This shows the increasing trend on the part of government to criminalize rules and regulations and treat US businesses in the same way drug dealers are treated. This is wrong and it is unfair. I am committed to working hard to correct the inequity that the law allows and insure there is fairness, due process, and the law is used for its intended purpose of stopping bad guys and stopping the very real deforestation of our planet”.

The Settlement

In order to be able to fully resume business, Gibson has agreed to pay over $300,000 in penalties in order to avoid prosecution in the case. Juskiewicz stated that paying the penalties was more the first step on the path of getting back to work building guitars than it was an admission of guilt. It allowed them to save time, and potentially millions of dollars in legal fees that would have been spent to prove their innocence.

Another part of the deal was for Gibson to make a “Community Service” payment of $50,000 to the National Fish And Wildlife Foundation.

Gibson will get the wood back from the second federal raid – the one from August of 2011, but they will not get the wood back from the raid in which the Madagascar ebony was seized (2009), which is valued at a quarter million dollars.

If you add it all up, the whole situation cost Gibson roughly $600,000 – and that’s not counting lost productivity over the past year.

What do you think?

Is this a telling example of an overzealous government reaching a bit too far into private business? Was armed force necessarily in the raid? Is this an example of a US company “buying” their way out of trouble?

I’m personally glad the situation has resolved, Gibson obviously plays an enormous part in the world of guitars, and they’ve made some of the best and most beautiful guitars out there, so while there may be question and argument going on into infinity, I’m just glad that at least from a legal point of view – it’s over.

 

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Tim Monaghan

Tim has been playing guitar & bass since he was 12 years old and has been in Jazz, funk, rock & metal bands. Influences include Jeff Beck, Stanley Clarke, Doug Stegmeyer, Baden Powell, Steve Vai, and pretty much anyone else who has a unique style that expresses their individuality. One of Tim’s many hobbies is building, tweaking, and repairing basses and guitars.

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    Love how government helps business. It looks as if they thought it was a drug raid and then to cost them over $600,000… they should be ashamed of themselves and their petty mindedness. As if Gibson guitars aren’t expensive enough all ready… this will not help anyone other than the government!

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